UNEMPLOYMENT should continue to ease in the coming years, as planned infrastructure development absorbs workers laid off by firms seeking to weather higher levies under current tax reforms, the government’s Budget chief told reporters on Wednesday.
Budget Secretary Benjamin E. Diokno said in a briefing that he expects joblessness in the country to maintain its downtrend, supported by the “Build, Build, Build” program of the administration of President Rodrigo R. Duterte that plans to spend more than P8 trillion on major infrastructure until 2022, when he ends his six-year term.
“We can build forever. Look at Singapore,” Mr. Diokno said, citing the “multiplier effect” of infrastructure projects and other initiatives like the jeepney modernization program.
Mr. Diokno made the remark when asked about layoffs announced by a soda producer, who cited organizational “restructuring” in the wake of additional taxes imposed on sugar-sweetened drinks starting January.
Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Act that was signed into law in December last year, imposed an excise rate of P6 per liter on drinks containing caloric or non-caloric sweetener and P12 per liter on drinks containing high-fructose corn syrup. Instant coffee mixes and milk are exempted from this new tax.
All four to five tax reform packages — of which TRAIN is just the first — are projected to contribute about a fourth of the P8.13 trillion needed to make “Build, Build, Build” come true.
Philippine Statistics Authority data show unemployment eased to five percent in October last year from April’s 5.7%, even as the latest level was still worse than October 2016’s 4.7%.
Underemployment — involving those who want an additional job or more work hours — fell to 15.9% in October last year from April’s 16.1% and from October 2016’s 18%, reflecting improvement of job quality as the economy grows.
The Duterte administration is stepping up spending on infrastructure projects in hopes of spurring gross domestic product (GDP) growth to a faster 7-8% annual pace from this year to 2022, from last year’s 6.7%, 2016’s 6.9% and a 6.2% annual average in 2010-2015.
Infrastructure spending, under “Build, Build, Build,” will increase to P1.84 billion in 2022, equivalent to 7.3% of GDP, from a planned P1.098 billion or 6.3% this year.
This strategy is designed to cut unemployment rate to 3-5% by 2022 from 5.5% in 2016 and poverty incidence to 13-15% by 2022 from 21.6% in 2015.
In the same briefing, Mr. Diokno said the government has enough funds to support overseas Filipino workers (OFWs) who flew home from Kuwait. Mr. Duterte on Friday asked OFWs in Kuwait to leave the country “within 72 hours” after the body of a Filipina maid was discovered in a freezer at a house where she used to work. Mr. Diokno said funding for livelihood assistance to returning workers may be sourced from the budgets of the Department of Labor and Employment, the Department of Foreign Affairs and the Department of Social Welfare and Development. — Melissa Luz T. Lopez